Most of the fired employees come from the hardware (Steam Box) and mobile divisions

Prepping for the launch of its upcoming Steam Box and expansion onto multiple mobile platforms, gaming giant Valve Corp. is making some major changes to its staff, including firing a number of employees. The software firm -- which became famous for its Half-Life series, its Source engine, and its Steam game distribution network -- has fired at least 25 employees, according toGamasutra. At least eight employees disappeared from a publicly available staff registry, seemingly partially confirming the news.

The casualties include Jeri Ellsworth, a hardware engineer responsible for prototyping the Steam Box controllers, and Jason Holtman, who helped architect the STEAM service and handle developer relations.

The bulk of the cuts appear to be in the hardware and mobile (Android) divisions. While ostensibly the Steam Box is still on track for a release sometime next year, the cuts raise question about whether Valve is second-guessing the leap into the hardware space.

Valve is thinning the herd.

Firings are very unusual at Valve.

The Seattle-area company is famous for its outside-the-box management strategy. There are no bosses, no employee at the company has an official title, and there are no cubicles -- employees migrate their desks around the building to wherever they're working each week in organic fashion.

In the past, most employees who didn't work out left on their own terms without being fired. Gabe Newell -- who The NYT says is at times referred to as the "CEO" of the company, but only by empty formality -- comments, "I get freaked out any time one person leaves. It seems like a bug in the system."

Valve employs a little over 300 employees, reportedly, so the cuts may represent as much as 8 percent of the total workforce. Valve employees told Gamasutra that the company is making "big decisions" and referred to the uncharacteristic firing as "the great cleansing".

I'm going to assume you either don't work for a large company or are just oblivious to what happens at the office.

When upper management decrees that no new hiring will occur to ensure the budget is met, a guy who is essentially useless can manage to stay employed simply by doing a small amount of work. Lower management would like to fire him, but they wouldn't be able to hire a replacement and therefore would have to offload his work onto people who are already busy. Because he does a small amount of work it ends up being better to have him around than to fire him, even though in an ideal situation he should just be fired and replaced. This happens more often than you'd think.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer